HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT

The United States Congress passed the
Health Insurance Portability and Accountability Act (HIPAA) in August
1996. HIPAA is a collection of federal laws and regulations has wide-ranging
impacts for healthcare providers, health plans, and businesses related to the
healthcare industry and is administered by the U.S. Health and Human Services
Department.

Improve portability and continuity of
health insurance coverage in the group and individual markets;

To combat waste, fraud, and abuse in
health insurance and health care delivery;

To promote the use of medical savings
accounts;

To improve access to long-term care
services and coverage;

To simplify the administration of health
insurance; and

Other purposes.

Title
I of the HIPAA law deals with health care access, portability, and renewability
with the intention of protecting health insurance coverage for workers and
their families when they change or lose their jobs. Title II of the law,
Administrative Simplification, which deals with preventing health care fraud
and abuse.

The major parts of
Administrative Simplification, as more fully defined in the section under HIPAA
components, include:

Transaction Standards

Code Sets

Unique Identifiers

Privacy

Security

Electronic Signature

The
primary aim of the Administrative Simplification is to affect healthcare
information systems in the following ways:

Almost
everybody involved in US healthcare have to comply with HIPAA. These
include any healthcare provider or organization that stores or transmits
information about patients (these include
all health care providers, even 1-physician offices, health plans, employers,
public health authorities, life insurers, clearinghouses, billing agencies,
information systems vendors, service organizations, and universities)
using electronic communication. Electronic communication includes but is
not limited to the following media; computer databases, tapes, disks,
telecommunications, FAX, Internet, and networks.

Thus, almost every healthcare provider or organization is
covered under the HIPAA regulations. There is a perception that these
laws only relate to billing and other issues with the federal Medicare system,
but this is not true. HIPPA also affect healthcare software applications when
they are used as standalone applications, but when they are used for storing or
transmitting patient information.

The HIPAA regulations relate to all electronic storage and
communication of individual healthcare information
and the following are the some important dates leading to the full
implementation of the law: